This Isn't Their Moment

For the first time in years, it's possible to lose money on a New York apartment.

Few jobs are as irregular as acting. Which may be why Jeremy Kushnier waited until last year to buy his one-bedroom in Morningside Heights. “I just got tired of paying rent,” says Kushnier, who coincidentally had been playing Roger in the Broadway musical Rent. “I was lucky enough to get great jobs in the past few years, and I wanted to build some equity.” So much for that: Sixteen months later, Kushnier’s selling his place and moving to Los Angeles to join his actress girlfriend. If he gets his price—$509,000—he’ll do slightly better than break even. But a little negotiation could wipe out his profit altogether. “The tough thing is, the market went down,” says his broker, Bellmarc’s Désirée Halac. “A lot of people are offering 10 percent less.”

Experts say it’s best to hold onto real estate for a couple of years to avoid paying capital-gains taxes and to weather changing markets like this one. (When the market was sizzling, homeowners could sell in a year and make at least 10 percent. If that year was 1999, it was more like 25 percent.) But if you bought recently and have to sell now, you may be in a position not heard of since the early nineties: You can actually lose money on a New York apartment. Some eager sellers are in the grips of an outside force like job relocation or a baby on the way. Others, like Corcoran’s Paul LeMarc Brown’s clients, have simply changed their minds. A year ago, LeMarc Brown handled a couple’s purchase of a Fort Greene co-op for $310,000. A few months after the close, they decided to visit One Hanson Place in downtown Brooklyn and fell hard for the redeveloped tower, which would give them views and amenities their postwar couldn’t. Now their old place is available for $345,000, which will—again, if they are lucky enough to get their price—leave them with a profit of less than $5,000.

Kushnier’s co-op doesn’t allow sublets so soon after an owner moves in—ruling out that option—and the expenses are piling up. “It’s a financial burden,” he says. Not that selling prematurely is always a problem. Prudential Douglas Elliman’s Darren Sukenik says he recently represented the owner of a condo whose company moved him elsewhere soon after buying. The apartment, in Morton Square, went in one day for full asking. “If it’s great and priced right, it’ll sell,” he says.